Gairika Mitra
India crypto adoption is leading the way in global grassroots movements, despite facing evolving regulations and high taxes.
The region, which includes Central and Southern Asia and Oceania (CSAO), saw over $750 billion in crypto inflows from July 2023 to June 2024, according to recent data from Chainalysis. This positions CSAO as the third-largest crypto market globally, after North America and Western Europe.
The region’s crypto growth is driven by institutional activity, with transfers worth over $10,000 accounting for the majority of transactions. India stands out, ranking second in terms of cryptocurrency value received and securing the top spot on the global adoption index. Despite a complex regulatory environment, the country’s crypto sector continues to thrive, the report noted.
India Crypto Boom
India’s crypto market has flourished even as regulatory and tax frameworks have evolved. The country imposes a 30% capital gains tax on crypto earnings, alongside a 1% tax deducted at source (TDS) on all transactions. These high tax rates have driven some investors to offshore exchanges with less stringent rules. However, India’s overall crypto activity remains strong, with investors adapting to the regulatory landscape.
In December 2023, India’s Financial Intelligence Unit (FIU) took action against several prominent offshore exchanges, including Binance, Kraken, and KuCoin, citing non-compliance with anti-money laundering laws. The FIU requested the Ministry of Electronics and Information Technology (MeitY) to block these exchanges’ URLs for Indian users. Despite these blocks, many users continued accessing these platforms via mobile apps, and the impact on crypto trading was short-lived.
India Forges Path to Crypto Leadership
The ongoing dialogue between India’s crypto industry and regulators is paving the way for clearer regulations, which are expected to further boost adoption. While high taxes and regulatory uncertainties have posed challenges, its crypto market remains one of the world’s most dynamic.
Meanwhile, industry leaders in India remain optimistic about the future of cryptocurrency in the country. Vikram Rangala, Executive Director of ZebPay, a major Indian cryptocurrency exchange, believes regulatory clarity will enhance India’s already vibrant crypto ecosystem. He anticipates that the integration of offshore exchanges into India’s market, along with revised tax policies, will promote innovation and create a sustainable environment for crypto and Web3 startups.
Dilip Chenoy, Chairperson of Bharat Web3 Association also expressed his optimism about India’s current position. In an email interaction with The Shib Daily, he revealed that it is heartening that India has been ranked number one again in the 2024 global crypto adoption index by Chainalysis. This achievement underscores India’s potential as a Web3 leader, he said.
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Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
